Inventory Flashcards

1
Q

Perpetual inventory

A

Average cost is computed at time of sale

Total cost / total units just before sale = avg cost
COGs = avg cost x units sold

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2
Q

Periodic inventory

A

Average cost computed at end of period

Total beginning inventory & all purchase (units & costs)
Total cost / available units for sale = avg unit cost
COGs = avg unit cost x units sold

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3
Q

Conventional retail inventory method

A

Retail inventory + Net Markups - Net Markdowns = Sales price of good available for sale - Sales at retail = Ending inventory in retail dollars

Convert to cost dollars = ending inventory in retail dollars x cost to detail % (inventory cost / retail inventory + net markups)

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